Google and Digg reverse economics and power of advertising

Valerie | 09 Jun 2009, 12:49

In an interesting article published on the Guardian Media website, American media pundit Jeff Jarvis argues that the Internet is challenging the traditional advertising paradigm by putting power in the hands of consumers:

“Selling scarcity in advertising - limited time, space, or eyeballs - is outmoded now that we have a medium that creates an abundance of connections with people; that enables relationships instead of mere messaging. The internet changes the means and motives of marketing in ways we are only beginning to witness”.

Jarvis goes onto talk about the changing nature of journalism and advertising, with content generated not just by journalists but also readers, citing the launch of social media news site Digg’s new advertising platform, Digg Ads and the move by German newspaper Bild to offer user-generated advertising as examples of the direction we are heading in.

Described by Techcrunch as a “self service advertising product”, Digg Adds enables users to vote on ads by ‘digging’ or ‘burying’ the ad. The more an ad is dugg, the less the advertiser will have to pay. Conversely the more an ad is buried, the more the advertiser is charged, pricing it out of the system.  Google, Jarvis argues, similarly rewards success with ads rising in priority on search-result pages based on the number of times it is clicked. The implication of this democratic approach is that “customers end up setting the prices - implicitly on Google, explicitly on Digg”.

Bild, the most-read newspaper in Germany, recently turned to “user-generated advertising”, not only as a tool with which to produce its own ads, but also as a service that it has made available to marketers and brands. It follows its move to create a “nation of reader reporters” earlier this year by recruiting the public to become involved in the news creation process, using Bild-branded cameras to record video footage that can be sent directly to the newspaper.

Jarvis believes this trend is the “future - and natural state - of media; collaboration not just in content creation, but now in advertising as well”, envisioning a scenario in which products themselves become the advertising and customers become the ad agency, dictating their own terms. What it means for marketers is that more than ever before, they will need to build real, sustainable brand equity to achieve success in this new age where user generated content is king.